UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): MARCH 16, 2005
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CENTERPOINT ENERGY, INC.
(Exact name of registrant as specified in its charter)
TEXAS 1-31447 74-0694415
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
1111 LOUISIANA
HOUSTON, TEXAS 77002
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 207-1111
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CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC
(Exact name of registrant as specified in its charter)
TEXAS 1-3187 22-3865106
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
1111 LOUISIANA
HOUSTON, TEXAS 77002
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 207-1111
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Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
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[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
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[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 8.01 OTHER EVENTS.
On March 16, 2005, the Public Utility Commission of Texas (Texas
Utility Commission) issued its written financing order to CenterPoint Energy
Houston Electric, LLC (CenterPoint Houston), the regulated transmission and
distribution subsidiary of CenterPoint Energy, Inc. (the Company). The financing
order authorized the issuance of transition bonds under the terms of the Texas
Electric Choice Plan (Texas electric restructuring law) so that the Company and
CenterPoint Houston could begin to recover a portion of the stranded costs and
certain other amounts authorized under the Texas electric restructuring law.
A number of parties have filed appeals of the financing order with the
district court in Travis County, Texas. Those appeals include, among other
claims, assertions that transition bonds cannot be issued until after pending
appeals of the Texas Utility Commission's true-up order are finally resolved,
that the amount of transition bonds authorized was excessive based on the
parties' views of the stranded costs that the Texas Utility Commission should
have authorized CenterPoint Houston to recover and that the Texas Utility
Commission was in error in ordering recovery through a competition transition
charge (CTC), instead of as a reduction of the amount of transition bonds, of
certain benefits to the Company from accumulated deferred federal income taxes.
The Texas electric restructuring law provides for expedited appeals
from a financing order. Appeals must be made to the district court in Travis
County, Texas, within 15 days of a financing order being issued by the Texas
Utility Commission, and any further appeals from a decision of the district
court are made directly to the Texas Supreme Court, bypassing review by the
Court of Appeals. The Texas electric restructuring law also limits appeals to
whether the financing order conforms to the Texas Constitution and law and is
within the authority of the Texas Utility Commission. The Texas Supreme Court
has previously held that securitization is constitutional. Expedited
securitization appeals are based on the Commission record and appellate briefs.
While it is not possible to predict with certainty the outcome of these
appeals or the timing of their ultimate resolution, CenterPoint Houston intends
to vigorously oppose them and to seek expedited consideration of them as
directed by the statute. CenterPoint Houston intends to argue that the financing
order should be affirmed because plaintiffs' contentions do not support the
required claims of statutory violations, and the financing order fully complies
with applicable statutory provisions.
In light of the filing of these appeals, the Company and CenterPoint
Houston expect that the schedule for issuing the transition bonds will be
delayed while the financing order appeals remaining pending. Prior to the
appeals, it had been expected that approximately $1.8 billion in transition
bonds could be issued by mid-2005 under the terms of the financing order. If the
issuance of transition bonds is delayed, the amount of bonds that can be issued
under the financing order increases as interest accrues on the un-recovered
balance of stranded costs.
Hearings began on April 6, 2005, on CenterPoint Houston's application
to collect through a CTC the approximately $600 million balance not included in
the financing order, along with a return on that balance. Other parties to the
proceeding have contended that the entire amount that CenterPoint Houston has
been authorized to recover, including the amounts to be recovered under the
financing order, should be recovered in the CTC. Although the Texas Utility
Commission's approach cannot be predicted now, the Company and CenterPoint
Houston would be amenable to a CTC that covers both the amounts authorized under
the financing order and the $600 million balance if that CTC would not prejudice
CenterPoint Houston's right to securitize the proper amount, including interest
as authorized in the financing order, once the appeals of the financing order
are concluded.
If sufficient transition bonds have not been issued by November 2005,
when CenterPoint Houston's $1.31 billion term loan matures, CenterPoint Houston
expects to rely on its existing $1.31 billion senior secured backstop credit
facility to refinance that loan, as reported previously. That credit facility
was obtained specifically to address such a situation and will effectively
provide a two-year term loan at significantly lower interest rates to refinance
the existing loan on maturity.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CENTERPOINT ENERGY, INC.
Date: April 8, 2005 By: /s/ James S. Brian
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James S. Brian
Senior Vice President and
Chief Accounting Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC
Date: April 8, 2005 By: /s/ James S. Brian
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James S. Brian
Senior Vice President and
Chief Accounting Officer